M a r k   N a y l e r

freelance journalist

home about me selected articles contact

NEWS

FOCUS ON FINANCE

THE EURO ZONE

MARK NAYLER

BAD TIMING

July 28th to August 3rd 2017 ed., P.26

       The so-called Gürtel case centres on allegations of cash-for  -contracts kickbacks among senior PP politicians during Spain’s property boom in the early 2000s. It involves 37 defendants and over 300 witnesses. Although Rajoy is not under investigation in the Gürtel case and denies any illegal activities, his appearance in court on Wednesday – an event unprecedented in Spanish history –

will serve as an emblem of a political class many Spaniards see as irretrievably corrupt.

    Rajoy was aware of how disastrous his court appearance would be for the PP’s reputation. He asked the judges if he could appear via video link instead, arguing that his journey to the courtroom 18km out of Madrid would be a misuse of public funds (one hopes the wonderful irony of that  argument was not lost on the judges). But he was summoned anyway and by mid-morning on Wednesday a soon-to-be-iconic photo was appearing online, showing Rajoy standing gloomily in the witness box. It is the Spanish PM’s appearance in the Gürtel case that will occupy headlines in the coming weeks, not the fact that Spain’s economy is enjoying a bumper  year.

his week, BBVA and Bankia SA announced that Spain’s economic  expansion in 2017

               


   
 

is likely to be 3.3% - even better than 2016’s 3.2%, which was almost double the eurozone average. Their bullish forecasts came after early indications that second quarter growth in Spain will be around 0.9% (the official Q2 statistics are out today) and if the two banks are correct, 2017 will be the best year for the Spanish economy since the country’s much-celebrated recovery began in early 2014.

           Various bodies – including the IMF, Spain’s Central Bank and the Spanish government itself – have been upwardly revising their economic predictions steadily throughout this year, but BBVA’s and Bankia’s contributions to this absurd numbers game will be tough to beat. Even so, Mariano Rajoy will probably up the official government forecast to match the banks’ sunny outlook sometime in the coming weeks. Currently, the Spanish government’s official prediction is for GDP expansion of 3% this year - a very conservative outlook compared to this week’s euphoric projections.

              Speaking of Rajoy, you may have wondered why he wasn’t asked to comment on BBVA’s revised growth forecast  when it was announced on Wednesday morning. The fastest expansion since the crisis is surely a big deal for a government that presents itself as the only competent steward of the Spanish economy. Indeed, Rajoy rarely misses a chance to tell Spaniards that it is his party, the conservative Popular Party (PP), that has dragged Spain out of recession and put it back on economic track. But on Wednesday morning, he was unable to celebrate a potentially bumper year of economic expansion. Instead, the Spanish prime minister was appearing as a witness in a corruption case that implicates many members of his own party

M a r k   N a y l e r

freelance journalist